bonus handouts - candlecharts.com
TRANSCRIPT
Bonus HandoutsInteractive Q and A companion for video workshop “Secrets of Becoming a Samurai Trader: Advanced
Candlestick Charting Techniques” – with Steve Nison
These extra handouts (which are not part of the video) will help test and refine your candlestick and trading skills.
Please print these and then answer the questions. Answer handouts are included at the back this bonus section.
Interactive Practice Questions
Interactive Question 1- Match the patterns on the left with the number of candle lines on the right:
1) one candle line
2) two candle lines
3) three candle lines
4) four or more candle lines
a) Hammer -b) Shooting star -c) High wave candle -d) Hanging man -e) Dark cloud cover -f) Piercing pattern -g) Bearish engulfing pattern -h) Bullish engulfing pattern -i) Tweezers top -j) Tweezers bottom –k) Harami -l) Evening star -m) Morning star –n) Falling window -o) Rising window -
Interactive Question 2Interactive Question 2
20 21 24 26 27 28 31 22002
3 4 7 8 9 10 11 14 15 16 17 18 22 23 24 25 28 29 30 3113.0013.0513.1013.1513.2013.2513.3013.3513.4013.4513.5013.5513.6013.6513.7013.7513.8013.8513.9013.9514.0014.0514.1014.1514.2014.2514.3014.3514.4014.4514.5014.5514.6014.6514.7014.7514.8014.8514.9014.9515.00
LIBERTY FIN
1) Which northern doji is bearish and why?
2) What pattern is completed at 3?
1
23
4March
11 18 25 1April
8 15 22 29May
6 13 20 28 3June
38.5
39.0
39.5
40.0
40.5
41.0
41.5
42.0
42.5
43.0
43.5
44.0
44.5FED DEPT STRS
During this time, the market is ascending. However, what are three reasons for caution?
Interactive Question 3Interactive Question 3
1) Name the two reversal signals at the arrows.
2) Would you use these signals to sell short?
3) What is bearish confirmation of these potential reversal signals?
Interactive Question 4Interactive Question 4
1) What pattern is this?1) What pattern is this?
2) Make a blended candle of this pattern2) Make a blended candle of this pattern
Interactive Question 5Interactive Question 5
8 15 22 29May
6 13 20 27
22.0
22.5
23.0
23.5
24.0
24.5
25.0
25.5
26.0
26.5
27.0
AMER EAGLE OUTF
1) Looking at the preceding trend, what is the difference between the bearish engulfing patterns at 1 and 2?
2) Which is more likely a top reversal?
3) Where is resistance after bearish engulfing pattern 2?
4) Was there a bullish engulfing pattern formed on April 22 and 23 (shown by the semi circle at 3)?
1
2
3
Interactive Question 6Interactive Question 6
Highlight the rising and falling windows with their respective support and resistance areas.
Point out the sessions when the window’s support or resistance are broken.
Interactive Question 7Interactive Question 7
1) Highlight the three rising windows before candle line 1 on March 222) Based on these rising windows, where would support levels be? If the first support at the top rising window was broken, where would we expect next support?3) What is the candle at line X?4) If one buys at line X, where is a potential resistance area (hint: connect highs from A and B)5) Based on the question above, would a buy on the close of line X present an attractive risk reward?
A
x
B
1
Interactive Question 8Interactive Question 8
1) What is the pattern at A?
2) What were the two aspects that made pattern A a more likely bottom reversal?
3) After the week of October 8 why was there support near $23?
A
Interactive Question 9Interactive Question 9
Name the patterns at 1 to 5 confirming a support area?
Interactive Question 10Interactive Question 10
1) On this intraday chart, what pattern is completed in the circled area?
2) At what price is this pattern completed?
3) If you buy at the completion of this pattern what is your stop? What is a potential target?
4) Based on the risk/reward on (3) above would you buy on the completion of this pattern at A?
Interactive Question 11
A
Interactive Practice Answers
Interactive Answer 1- Match the patterns on the left with the number of candle lines on the right
1) one candle line
2) two candle lines
3) three candle lines
4) four or more candle lines
a) Hammer - 1b) Shooting star - 1c) High wave candle - 1d) Hanging man - 1e) Dark cloud cover - 2f) Piercing pattern - 2g) Bearish engulfing pattern - 2h) Bullish engulfing pattern - 2i) Tweezers top - 2 j) Tweezers bottom – 2k) Harami - 2l) Evening star - 3m) Morning star – 3n) Falling window -2o) Rising window -2
20 21 24 26 27 28 31 22002
3 4 7 8 9 10 11 14 15 16 17 18 22 23 24 25 28 29 30 3113.0013.0513.1013.1513.2013.2513.3013.3513.4013.4513.5013.5513.6013.6513.7013.7513.8013.8513.9013.9514.0014.0514.1014.1514.2014.2514.3014.3514.4014.4514.5014.5514.6014.6514.7014.7514.8014.8514.9014.9515.00
LIBERTY FIN
1) Neither was a bearish doji since both made new highs for the move. It was only after doji 2 that we got bearish confirmation since that close was under the doji’s close.
2) A bearish engulfing pattern is completed at 3
1
23
Interactive Answer 2Interactive Answer 2
4March
11 18 25 1April
8 15 22 29May
6 13 20 28 3June
38.5
39.0
39.5
40.0
40.5
41.0
41.5
42.0
42.5
43.0
43.5
44.0
44.5FED DEPT STRS
1) towards resistance (at dashed line)
2) real bodies shrinking
3) bearish shadows
Interactive Answer 3Interactive Answer 3
1) A doji and shooting star
2) Although there was a doji and shooting star, each made a new high close for the move. As such we wouldn’t recommend selling short. This shows the importance of looking at the overall technical picture
3) Based on (2) above, we need a lower close to confirm the bearish implications of the doji and shooting star. This came at line X.
Shooting star
Doji
X
Interactive Answer 4Interactive Answer 4
1) A piercing pattern1) A piercing pattern
2) Make a blended candle of this pattern 2) Make a blended candle of this pattern –– see belowsee below
Blended candle real body = open of the first session, close of the last session.
Blended candle shadows = highest high and lowest close of all sessions
Interactive Answer 5Interactive Answer 5
8 15 22 29May
6 13 20 27
22.0
22.5
23.0
23.5
24.0
24.5
25.0
25.5
26.0
26.5
27.0
AMER EAGLE OUTF
1) Only the second one was a classic example of the bearish engulfing pattern because that came after a rally while the pattern at 1 came in a box range as shown by the horizontal lines.
2) Based on the above, 2 was a more likely top reversal.
3) The highest high of the pattern is resistance based on a close (as shown by dashed line)
4) This not a bullish engulfing pattern at 3. While it is a white candle wrapping a black candle, the preceding trend is wrong. A bullish engulfing pattern come after a downtrend
1
2
Resistance area
Interactive Answer 6Interactive Answer 6
3
Falling window
Falling window
Rising window
Broke falling windows’ resistance levels
Interactive Answer 7Interactive Answer 7
1) The rising windows are shown at arrows 1 to 32) We would look for the bottom of rising windows 1, 2 and 3 to be potential support levels3) Line X is a hammer4) Potential resistance area at the falling resistance line that connect the highs from A and B5) Buying the hammer’s close would not be a good trade based on the risk/reward as shown below
1
2
3
hammer
A
B
risk
reward
Interactive Answer 8Interactive Answer 8
x
1) A bullish engulfing pattern
2) This white candle wrapped around four black candles and confirmed a support area set a few weeks before the bullish engulfing pattern
3) The reason for support near $23 was due to the rising window at the arrow.
A
Interactive Answer 9Interactive Answer 9
1) Bullish engulfing pattern
2) Doji confirming support at bullish engulfing pattern
3) hammer 4) Piercing pattern
Rising window
Interactive Answer 10Interactive Answer 10
1) Bullish engulfing pattern (since this is an intraday chart, even if the close and open are the same it is still viewed as an engulfing pattern)
2) The bullish engulfing pattern is completed at 34.90
3) The stop is under the lows of the bullish engulfing pattern near 34.60.A potential target could be resistance set by the doji which near 35.05.
4) Based on (3) above this isn’t an attractive trading opportunity since the risk is 30 cents and the reward 15 cents.
Interactive Answer 11
A
doji